In its July 30 announcement, Finance Canada introduced a change that will deal with a technical issue related to the revenue decline calculation for employers that are using the general approach for the Canada Recovery Hiring Program (CRHP), Canada Emergency Wage Subsidy (CEWS) and the Canada Emergency Rent Subsidy (CERS).
The issue was discussed in our recent webinar with the CRA on the CRHP. Under the general approach, an employer compares its current revenue with the same period before the pandemic. Once an approach is picked in period 5, then the employer must follow this approach for all remaining periods. In the question we asked the CRA, the employer was considering their claim for period 14 whereby revenue for March 2021 is compared with revenue for March 2019. This was problematic, as the employer in question was a new business that was commenced in May 2019. In its response, the CRA said that claiming the CEWS/CRHP in period 14 and subsequent periods would be problematic because the employer cannot switch to the alternative method. However, they also pointed out that the matter had been referred to Finance Canada.
Given the filing deadline for period 14 is October 7, there is a concern whether legislation will be enacted in time, and we will follow up with the CRA on how they plan to apply this change.
In addition to this change, the draft legislation also includes proposed amendments that will enact the June 2 Finance Canada announcement (see our June 3 news item).